AAFP, Other Primary Care Organizations Urge Rapid Senate Approval of Extended Medicaid Benefits

July 14, 2010 02:20 pm News Staff

The AAFP and other leading primary care organizations have called on the U.S. Senate to quickly pass a measure that would extend the increased Federal Medical Assistance Percentage, or FMAP, provided by last year's stimulus bill through the first six months of 2011 to help ensure health care access for millions of Medicaid beneficiaries.

"Our organizations stand ready to assist Congress in support of legislation to stabilize Medicaid at this critical time," says a July 13 letter sent to every member of the Senate and signed by the AAFP, the American College of Physicians, the American Osteopathic Association and the American Academy of Pediatrics. "We urge you to act swiftly to extend the enhanced FMAP provision for an additional six months and help ensure continued access to care for our patients."

The FMAP essentially determines the federal government's share of funding for each state's Medicaid program.

Although the House passed a bill, H.R. 4213(www.thomas.gov) (at the THOMAS website, type "H.R. 4213" in the search box after selecting "Bill Number"), to extend the increased FMAP match for the first six months of 2011, the Senate failed to approve the measure, leaving in place an expiration date of Dec. 31. Without an extension, 34 states who had counted on an enhanced FMAP will have to make "painful cuts to Medicaid benefits or provider payment," the letter states.

"Either option hurts patients; both are avoidable," the letter continues.

Federal and state governments jointly fund the Medicaid program, and the American Recovery and Reinvestment Act of 2009, or ARRA, provided an increased FMAP for each state's Medicaid program to assist with the increased demand for services caused by the recession. This increased rate has enabled states to maintain Medicaid access for many of the nation's most vulnerable populations, including low-income pregnant women, mothers, children, the elderly and the disabled, says the letter.

The current FMAP rate is set to expire when states are only halfway through the fiscal year, which has dire implications for state budgets, the letter notes. Medicaid rolls, meanwhile, continue to grow as the recession pushes more Americans into poverty.

The organizations add that although the first signs of an economic recovery may be occurring in some states, most states continue to face dire fiscal situations. "According to the National Governors Association and the National Association of State Budget Officers, states face a cumulative $62.3 billion shortfall for the 2011 fiscal year," the letter states.

It calculates the effect of state cutbacks without an extension of the current FMAP rate, noting, as an example, that Alabama would have to reduce its fiscal year 2011 budget by $197 million, an amount that accounts for 12.5 percent of the noneducation budget in a state where Medicaid pays for nearly half of all births and two-thirds of all nursing home costs.

"Maine may be forced to cut provider payments by up to 10 percent, while in North Carolina, the governor and legislature have negotiated an across-the-board cut to close a $519 million shortfall that will be created if the extension is not approved," says the letter.

Georgia will face a $375 million shortfall without extension of the current FMAP rate and will lose nearly $650 in federal matching funds, further exacerbating the state's budget gap, according to the letter. "The Georgia Budget and Policy Institute estimates that at least a 20 percent cut in provider payments would be required to begin to close such a gap."

In addition, says the letter, Arizona, which is facing a $385 million budget shortfall, has enacted a budget that calls for eliminating Medicaid coverage for 310,000 recipients. The extension of the increased FMAP provision would cover 91 percent of the state's current budget shortfall, according to the letter.